CURRENCY INFLATION MCQS SET 29

CURRENCY INFLATION MCQS SET 29

281) Hard Currency is defined as currency:
A) which can hardly be used for international transactions
B) traded in foreign exchange market for which demand is persistently relative to the supply
C) which is used in times of war
D) which loses its value very fast
Correct Answer: traded in foreign exchange market for which demand is persistently relative to the supply
   
282) Convertibility of the rupee implies:
A) being able to convert rupee notes into gold
B) freely permitting the conversion of rupee to other major currencies and vice versa
C) allowing the value of the rupee to be fixed by market forces
D) developing an international market for currencies in India
Correct Answer: freely permitting the conversion of rupee to other major currencies and vice versa
   
283) Black money is :
A) counterfeit currency
B) illegally earned money
C) money earned through underhand deals
D) income on which payment of tax is usually evaded
Correct Answer: income on which payment of tax is usually evaded   
 
284) Broad money in India is :
A) M1
B) M2
C) M3
D) M4
Correct Answer: M3
   
285) Consider the following statements:
Full convertibility of the rupee may mean:
1. its free float with other international currencies.
2. its direct exchange with any other international currency at any prescribed place inside and outside the country.
3. it acts just like any other international currency.
Which of these statements are correct?
A) 1 and 2
B) 1 and 3
C) 2 and 3
D) 1, 2 and 3
Correct Answer: 1 and 2

286) Which of the following Mahatma Gandhi series of currency notes issued by the RBI has a drawing of the 'Parliament House' depicted on it?
A) Rs.500
B) Rs.100
C) Rs.50
D) Rs.10
Correct Answer: Rs.50   
 
287) Which of the following Mahatma Gandhi series of currency notes issued by the RBI has “ecology” depicted on it?
A) Rs.500
B) Rs.100
C) Rs.50
D) Rs.5
Correct Answer: Rs.100
   
288) The Issue Department of the RBI maintains a __________ against printing of notes:
A) Minimum Reserve System
B) Proportional Reserve System
C) Proportional Gold Reserve System
D) Proportional Foreign Securities Reserve System
Correct Answer: Minimum Reserve System   
 
289) Devaluation of currency by a country is meant to lead to:
1. expansion of import trade
2. promotion of import substitution
3. expansion of export trade
A) 1 only
B) 2 and 3
C) 1 and 2
D) 1 and 4
Correct Answer: 2 and 3
   
290) Which of the following is incorrect about convertibility?
A) The exchange rate should be determined by the forces of demand and supply of the currency
B) The exchange rate would indicate the strength of the economy
C) It would discourage black market transactions
D) The RBI will be a direct player now rather than being an indirect one
Correct Answer: The RBI will be a direct player now rather than being an indirect one